The interest rate that commercial banks charge each other for loans of reserves to meet their minimum reserve requirements is called:

Question

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The interest rate that commercial banks charge each other for loans of reserves to meet their minimum reserve requirements is called the federal funds rate. The treasury bill rate is the interest rate paid on government securities, and the prime interest rate is the rate that banks charge their most creditworthy customers. None of these options accurately describes the interest rate in question.

The Interest Rate That Commercial Banks Charge Each Other for Loans